Orica Limited : Opportunity of technical rebound
Entry price | Target | Stop-loss | Potential |
---|
A$23.72 |
A$0 |
A$23.5 |
-100% |
---|
Orica limited is a diversified manufacturing company. The company produces industrial and specialty chemicals, coatings for vehicles, and food and beverages flavoring.
Despite a low net profit for the first half of this financial year, the company continues to target a higher objective. For the first six month, net profit was down 4% at A$ 253.3 million from A$ 263.8 million a year earlier hit by cost of shutting and cost of foreign-exchange movements.
However profitability is expected to be higer in 2012 than 2011, year subject to sluggish global economic conditions according to the Orica’s chief executive.
Graphically, the stock has sharply declined as shown by the downward trend of the 20-days moving average. The AUD 23.7 level has stopped this bearish movement and could be an entry point for a technical rebound.
In this context, investors could take a buy position on the current price to target the AUD 25.6. A stop loss will be fixed at AUD 23.5.
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